VANCOUVER, BC and ZHONGSHAN, China, Feb. 16, 2017 /CNW/ - Ballard Power Systems (NASDAQ: BLDP; TSX: BLDP) today announced that it has signed a
definitive agreement relating to technology transfer, licensing and supply arrangements with strategic partner Zhongshan
Broad-Ocean Motor Co., Ltd. ("Broad-Ocean"; www.broad-ocean.com/en/index.html) for the assembly and sale of FCveloCity® 30-kilowatt (kW) and 85kW
fuel cell engines in China. Under the deal, Broad-Ocean will manufacture fuel cell modules in
three strategic regions in China, including Shanghai. The deal
has an estimated value of approximately $25 million in revenue to Ballard over the initial 5-year
term, including $12 million in Technology Solutions revenue.
Randy MacEwen, Ballard President and CEO said, "Converging macro
trends in China, including large-scale urbanization, continued build-out of mass urban
transportation, degrading air quality and a mandate to address climate change, together present an historic opportunity for
zero-emission fuel cell solutions in the world's largest mobility market. Our strategic partnership with Broad-Ocean is a central
piece in our China strategy, premised on the establishment of a comprehensive local fuel cell
supply chain and related ecosystem to address the fast-growing clean energy bus and commercial vehicle markets."
Mr. MacEwen continued, "We are thrilled to have Broad-Ocean as a key partner to accelerate adoption of fuel cell-powered
heavy-duty vehicles in China. Ballard's fuel cell modules will be locally manufactured in key
Chinese markets by Broad-Ocean, a highly-regarded company that has manufacturing scale, supply chain muscle, operations
excellence, relationships with government and with bus and commercial vehicles OEMs, and a strong balance sheet. Ballard will
also benefit from Broad-Ocean's demand pull-through of fuel cell vehicles for use in its own new energy vehicle leasing
business."
Mr. Charles Lu, Founder and Chairman of Broad-Ocean added, "Hydrogen fuel cells are entering an
exciting new growth phase in China and we intend to be at the forefront. We believe that this
cooperation between Ballard and Broad-Ocean combines the strengths of both companies and will put us in a leading position in
this new hydrogen fuel cell growth phase in China."
In each of the three assembly operation locations, Broad-Ocean plans to engage with local governments as well as with bus and
commercial vehicle OEMs for deployment of fuel cell buses and commercial vehicles incorporating Ballard-designed modules
manufactured by Broad-Ocean.
Broad-Ocean will make payments to Ballard at closing and based on certain commissioning milestones, initial supply agreements,
and recurring royalty payments. Ballard will also have the exclusive right to purchase fuel cell engines from any of the
Broad-Ocean manufacturing operations for sale outside China.
Each fuel cell engine assembled by Broad-Ocean will utilize FCvelocity®-9SSL fuel cell stacks, initially
manufactured by Ballard at its Vancouver HQ facility. Stack supply will be transferred to Guangdong Synergy Ballard Hydrogen
Power Co., Ltd. ("JVCo"), the joint venture owned by Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. ("Synergy") and
Ballard in the City of Yunfu in China's Guangdong Province,
once JVCo becomes fully operational, expected in late-2017. From that time forward, Ballard will supply membrane electrode
assemblies (MEAs) on an exclusive basis for stacks manufactured by JVCo.
This transaction is subject to customary closing conditions and is expected to close by Q2 2017.
Founded in 1994, Broad-Ocean is headquartered in the City of Zhongshan in Guangdong Province
and is listed on the Shenzhen Stock Exchange. The Company is a leading global manufacturer of motors that power small and
specialized electric machinery for electric vehicles (EVs), including buses, commercial vehicles and passenger vehicles, and for
heating, ventilation and air conditioning (HVAC). Broad-Ocean produces more than 50 million motors annually for customers on 5
continents. On August 18, 2016 Broad-Ocean became Ballard's largest shareholder following an
investment of $28.3 million in Ballard common shares, representing approximately 9.9% of Ballard's
outstanding common shares following the transaction.
About Ballard Power Systems
Ballard Power Systems (NASDAQ: BLDP; TSX: BLDP) provides clean energy products that reduce customer costs and risks,
and helps customers solve difficult technical and business challenges in their fuel cell programs. To learn more about Ballard,
please visit www.ballard.com.
This release contains forward-looking statements concerning planned product deployments, provision of services, market
adoption and demand for our products and available subsidies. These forward-looking statements reflect Ballard's current
expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Any such forward-looking statements are based on Ballard's assumptions relating to its
financial forecasts and expectations regarding its product development efforts, manufacturing capacity, and market demand.
These statements involve risks and uncertainties that may cause Ballard's actual results to be materially different, including
general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and
achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard's
future performance, please refer to Ballard's most recent Annual Information Form. Readers should not place undue reliance on
Ballard's forward-looking statements and Ballard assumes no obligation to update or release any revisions to these forward
looking statements, other than as required under applicable legislation.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities. The Ballard
Common Shares have not been registered under the United States Securities Act of 1933, as amended, or the securities laws of any
other jurisdiction and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
SOURCE Ballard Power Systems Inc.
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